Maple Leaf Foods to buy Schneider Corp.

Canada's largest meat processor, Maple Leaf Foods Inc. (TSX:MFI), said Thursday it will buy Schneider Corp. from Smithfield Foods Inc. of Virginia.

The deal is valued at $515 million including assumed debt.

"We are very excited about the opportunity to bring together two outstanding Canadian food companies," Michael McCain, Maple Leaf's president and CEO said.

"Our vision is to create the world's premier consumer foods company, by building on the strengths of both organizations," he said.

Based in Kitchener, Ont., Schneiders had sales of $1.24 billion and operating earnings of $54.1 million in its last fiscal year. The company employs about 5,000 people at 20 facilities across the country.

"This is an excellent strategic fit that will reward our employees, customers and consumers, and strengthen our contribution to the Canadian economy," Schneider CEO Douglas Dodds said.

Maple Leaf said it will pay for the acquisition through debt. The company added that it is considering issuing $100 million to $200 million in treasury shares as part of a long-term financing plan.

The company also has a commitment from the Ontario Teachers' Pension Plan Board to buy up to $150 million in shares any time within a year of the closing of a deal.

Maple Leaf had mounted a hostile takeover attempt for Schneiders in 1997, only to lose out to Smithfield.

Maple Leaf shares gained 38 cents to close at $10.38.